Budget 2026: New Support for First-Time Buyers and Other Key Property Announcements

In a similar vein, the Chancellor announced:

“For every young person who is working hard, saving what they can, and dreaming of their first home, I’m taking action. I’m announcing that a First Time Buyer ISA will replace the Lifetime ISA.”

At present, we understand that the new ISA will work as follows: 

• Saving: Up to £4,000 a year. You must be 18 or over. There is no upper age limit.
• Bonus: 25%, up to a maximum of £20,000 based on your final balance at the point of house purchase.
• When you get it: The bonus is paid when contracts are exchanged, with no withdrawal charge. You will then have 90 days to complete on your home purchase.
• House price limit: £450,000.
• The rules: At present, we understand that you must hold the account for at least one year and use it with a mortgage. You can choose a cash or a stocks and shares account, but you can only have one First Time Buyer ISA at a time.
• Help to Buy ISA: You can move your full balance in on top of the annual limit, between 6 April 2029 and 1 December 2030.
• LISA: You cannot transfer a LISA into a First Time Buyer ISA, but you can use both towards the same home purchase.

The Chancellor also announced a key change to the penalty rules:

“If the home you want costs more than the limit, you will get back at least what you put in”.

At Myerson, we appreciate how long it takes to save a deposit for your first home and look forward to applying for your bonus when contracts are exchanged. 

Despite widespread speculation, the Mansion Tax is not falling and will apply to all properties valued at £2 million or more in England from April 2028, with no change to the threshold or the four bands.

For a full explanation of how the tax works, including the four bands, read our earlier blog: Budget 2025: Mansion Tax Explained.

Following the Autumn Budget 2025, the government has also published its response to this year’s consultation which confirms how the surcharge will work.

We now understand the following: 

• The legal owner, rather than the occupier, must pay the surcharge. Joint owners are jointly and severally liable so each could be asked to pay the full amount. 
• Councils can issue bills from March 2028. Owners can defer payment until the property changes hands, or earlier if they choose, if the household has an income of £35,000 or less, capital savings of £16,000 or less, or a member who meets the disability criteria. The interest rate on deferred amounts will be set in regulations. There are some exemptions, for example: care homes, hospices, student halls of residence and military barracks.
• The government will permit some discounts of up to 100%. A non-exhaustive list includes: registered social housing, refuges, farmhouses and farmworkers' accommodation on working farms, qualifying charity properties, and new builds still owned by the developer (until first sale, or 12 months after completion).
• Empty homes carry a 100% premium, which will apply to homes left unfurnished or unoccupied for more than twelve months. Properties will be revalued every five years. The surcharge will be legislated in the Finance Bill 2026-27, with detailed regulations to follow.

If your home is worth £2 million or more, you should check whether it falls within the surcharge and which band it will sit in. Once you understand your position, it is wise to seek specialist legal advice.